As the world moves towards a sustainable future, enterprises are making even greater efforts to become more sustainable, with some expressing their intent to go beyond carbon neutral and into carbon negative. This has brought forth the benefits of circular economy practices.
India is one of the ‘Big 5’ countries, along with the United States, United Kingdom, Brazil, and China that are expected to experience a surge in their respective edge markets. It was the second largest market for data center infrastructure in 2019 and the second fastest growing market in Asia/Pacific after China. This has resulted in a growing demand for hyperscale data centers as major cloud players set their sights on Indian data centers.
Sustainable growth is the key to an ‘Aatmanirbhar’ Bharat. A development paradigm that leads to the most efficient use of resources is urgently needed. With a growing population, fast urbanisation, climate change, and pollution, India must transition to a circular economy.
A new paradigm that highlights the need to take a complete view of products and processes, the circular economy is an economic approach aimed at minimising waste and the continuous use of resources. India’s manufacturing systems must implement techniques based on circular economy concepts to not only minimise resource dependency but also improve competitiveness.
A circular economic path taken by India might result in huge annual benefits as well as major reductions in congestion and pollution, which would have a snowball impact on the economy.
Digital technologies will be key to enabling the visibility, orchestration, and management of circular economies and operations. With many digital leaders already at the forefront of sustainable business and economic efforts, their expertise combined with their existing capability can enable the move towards circular economies and the sustainability benefits they bring.
New economic thinking and action
As large organisations sustainability efforts intensify, many see circular economies as the new operating model for the future, allowing them to meet sustainability goals while remaining responsibly profitable.
A report from the Ellen MacArthur Foundation projects a circular economy adoption in India will generate an annual benefit of Rs 40 lakh crore ($624 billion) in 2050 and cut GHG emissions by 44%.
The reduction of waste and the ever-increasing demand for raw materials are just two of the many advantages of circular operating models. The COVID-19 pandemic recovery is seen as an opportunity to begin those efforts to move towards more sustainable, more circular modes of business. However, there are many measures that need to be put in place before a circular economy can be scaled.
Designing for the circle
From a product perspective, circularity begins with design. Better design allows for greater serviceability during operation, with the help of readily available spare parts, allowing for longer operational hours and utilisation. Furthermore, modular design with repurposing, remanufacturing, and disassembly in mind from the start, combined with a focus on entire lifetime efficiency, can massively reduce waste while promoting longer resource utilisation and maximum recycling. Single-use materials are becoming less popular, as evidenced by a 17% increase in global demand for recycled materials between 2012 and 2016.
Digital technologies are viewed as a key enabler of circular economies, connecting, aggregating, and allowing data analysis to support the complex and sophisticated coordination of disparate resources required. A key recommendation of the Circularity Gap Report 2020 is to promote global data collection and sharing collaboration. According to the report, “this will enable the identification of key data needed to measure and track circular performance, as well as provide the necessary infrastructure and alliances to collect, retrieve, and share data.”
As digital leaders embark on their own circularity journey, shared resources and experiences enable organisations of all sizes to learn, understand, and apply the principles.
Sustainability efforts cannot be effective unless they are coordinated across the entire ecosystem, requiring not only consent but also the deep commitment of supply chain partners, including Scope 3 emissions. The transition to circularity will necessitate even greater commitment from supply chain partners.
According to Gartner, these efforts not only accelerate efforts to achieve sustainability goals but also build greater resilience into supply chains. The analyst has recommended a number of measures to transform supply chains in order to transition to circular models, such as deeper customer engagement and clear goals and measurement criteria.
Life cycle and circular solution
The level of collaboration and integration required to enable circular economies is unprecedented. Only digital technologies, ranging from IoT and edge computing to AI and real-time analytics, can bring disparate data sources and combined resources together into a coherent, orchestrated strategy.
This spectrum of efforts in circular economies can be developed into a lifecycle, enabled by digital tools and technologies, to ensure that infrastructure, equipment, software, and resources can be managed throughout their entire lifecycle, virtually eliminating waste, reducing raw material requirements, and improving economic outcomes.
The Circular Economy is widely regarded as a means of addressing many of the world’s problems while also enabling sustainability efforts. Digital management technologies are recognised as critical enablers of the practices required to transition to more circular modes of operation. Digital leaders have the expertise and experience required to lead in this area, offering a set of tools and, more importantly, insights to enable lifecycle management to continuously monitor, analyse, and improve.
Natalya Makarochkina, Senior Vice President, Secure Power International Region, Schneider Electric